Susan Lazar Consulting, Inc.
Publications for Family Owned Businesses

Publications for Family Owned Businesses

Give Non-Related Employees A Proper
Welcome into Family Firm
By Susan Lazar

When outsiders join a family business, it takes more than a handshake to make them feel welcome. In fact, it takes a concerted effort to keep these "outsiders" from feeling like they have little stake in the company-and even less of a future.

If you are a family business owner about to bring an outsider into your organization, you can minimize the hazards and increase your chances of having an effective working relationship with your new executive by making some important decisions before you hang out your "help wanted" sign. Hammer out some honest answers to the following questions:

  • Are we looking for an heir apparent -- or are family members in line for that position?
  • Are we looking for a "place holder," someone who can assume certain duties until a designated family member is ready to take over?
  • Are we creating/filling a position in which the company can offer some job security?
  • How does this position relate to existing positions? What are the reporting relationships, up and down?
  • What outside skills will best complement those already present in the pool of talent?
  • What work style and personality type will best mesh with those of current executives and/or family members?

Once these and other job-related questions are answered, create a mutually agreed upon job description. Only then should your search begin.

Clear Communication

Be honest with those you recruit. If you are looking for a "place holder," say so. You then may get someone who enjoys the challenge of a new company for several years, but then likes to move on. And, you'll certainly avoid the resentment and poor working relationship that could result from hiring someone with false expectations.

If you can legitimately assure your candidate that a family member isn't waiting in the wings -- that the position is secure as long as performance standards are met -- you can ward off unproductive worry and speculation.

Make sure the rest of the company (and affected family members) have a clear understanding oft the executive's role and responsibilities. If you've told your new executive the job is secure, but haven't made that clear to family members with similar skills, you've almost guaranteed an on-going conflict. If you've given your new executive responsibilities that once were yours, make sure the entire company knows you have done so -- and back up your words with action (or lack of action, as the case may be.)

A Feeling of Ownership

To be effective, top executives need to feel a sense of ownership for the company. That can be difficult, especially if the executive has no actual ownership stake, and others in the company do.

You may compensate by offering a wage and benefit package that is slightly higher than the industry average. Certainly, the package must be competitive -- and you should continually assess its competitiveness, or risk losing a valued employee. In addition to a solid wage and benefit package, you can add a bonus potential based on very clear performance goals.

But good money alone usually won't satisfy a key executive who feels left out of the action. If you have brought in a high-level manager, make sure they are treated that way. Your new executive should be part of all management team meetings, even some of those that used to be only family. By participating in planning and budgeting activities together, family and non-family executives will become more a part of the same team.

Staying the Course

Non-family executives can be valuable assets to a family-owned firm. They bring outside insights and new skills that can help the business become and remain more competitive. Establishing and maintaining an effective working relationship involves little more than applying sound human relations principles that should be present in any successful business.

  • Continue to keep the lines of communication open -- in both directions.
  • Keep your executive up-to-date about the prospects for continued employment and be honest about what plans you have for incoming family members.
  • Keep wages and benefits competitive with your industry.
  • Give the person clear responsibilities and authority and make it just as clear to the rest of your company.

Apply these principles consistently and both your company and your new executive can look forward to a successful business relationship.